Inclusive Business with Polypropylene Bags in Ecuador
Wednesday 16 September 2009 - 23:38A well-known Ecuadorian company that manufactures polypropylene bags is now working with SNV. Institutions are among the company’s top customers and account for 60-70% of its sales. Middlemen account for the remaining sales, and therefore the company had little idea who the end-users of their plastic bags were.
When the head of the company heard about the concept of Inclusive Business, he recognised that it was an opportunity for the company to establish closer, more direct ties with producers and decided to engage SNV’s services to draw up a consumer-oriented business model, focusing on those users who are at the base of the pyramid, that is, small producers of various products such as rice, corn, coffee, among others.
As a result, SNV proposed that the company adopt a model that incorporates farming associations such as distributors for small producers who are members of these associations. This model would ensure sustainability of the business, with the following benefits:
Community benefits:
• Generating savings for small producers.
• Low-income persons gain access to quality products to better preserve their harvest.
• Distribution model makes it possible to increase income earnings for small producer associations.
Company benefits:
• Access to a new market never before targeted.
• Innovation and diversification of distribution channels.
• Recognition of the brand name in new market segments.
As part of the pilot project, the selected associations will be asking for about 15,000 bags which shall be distributed among small producers of rice, corn, and coffee. Effective demand the following year could climb to 100,000 bags as a result of harvesting seasons, when a larger number of bags is needed.
As a result, SNV proposed that the company adopt a model that incorporates farming associations such as distributors for small producers who are members of these associations. This model would ensure sustainability of the business, with the following benefits:
Community benefits:
• Generating savings for small producers.
• Low-income persons gain access to quality products to better preserve their harvest.
• Distribution model makes it possible to increase income earnings for small producer associations.
Company benefits:
• Access to a new market never before targeted.
• Innovation and diversification of distribution channels.
• Recognition of the brand name in new market segments.
As part of the pilot project, the selected associations will be asking for about 15,000 bags which shall be distributed among small producers of rice, corn, and coffee. Effective demand the following year could climb to 100,000 bags as a result of harvesting seasons, when a larger number of bags is needed.
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